Based on a recent poll of municipal councils, English councils are preparing to sell social clubs, sports centres, and shopping arcades as they bet on a rapid disposal of properties to balance the books.
Growing Financial Pressures Drive Asset Sales
A coalition of councils for second-tier cities in the UK reported that 60% of councils are planning to sell assets to meet the rising costs of adult and children’s social care.
Local governments have in the past faced criticism for selling playing fields and land to shore up their finances, but they contend they must continue to raise vital cash from property disposals or declare themselves bankrupt.
This coalition noted that a high proportion of authorities attempting to raise money from a quick sale of holdings marked “a distinct shift from 2024, when the largest share (six in ten) of local leaders stated they would focus on restructuring services and using savings to weather growing fiscal pressures.”
Specific Cases of Proposed Disposals
One local authority in Kent said its asset disposal plan featured the sale of a shopping centre in Rainham and a community venue in another town to raise 20 million pounds over five years.
- Gillingham golf club and commercial properties owned in Worcestershire and Suffolk, which all generate rent for Medway council, will also be sold under the plan.
Local Levy Rises and Wider Financial Strains
This research of local authorities in the coalition, which covers Sunderland, Southampton, Gloucester and Salford, further found that more than 70% of authorities will need to increase council taxes next spring to cover the rising cost of core provisions, increased rates of housing insecurity, and a longstanding housing shortage.
The authority explained it will proceed with property disposals after sharp increases in the cost of children services, support for vulnerable learners, elderly and disability services, and temporary accommodation.
“We are taking creative strategies but certain measures require time to deliver both improved services and cost efficiency,” said Vince Maple.
He added: “We face population challenges which will persist to increase the strains we have. As a unitary authority, we had a 91% cut in our revenue support grant from over the past decade, which is extremely difficult.”
National Patterns and Projections
Research of regional authorities recently also found council budgets being stretched by the growing number of young people and older individuals requiring Send support.
The County Councils Network projected that council deficits will reach 4.4 billion pounds a year by 2029, as they grapple to manage increased demand.
Ministers have put off scheduled changes to the Send system until next year after a white paper outlining those reforms has been postponed.
Deprivation and Financial Gaps
According to the latest deprivation measures (IMD) for English councils, several key cities members were included in the most deprived in the country.
- “Participating urban centers like Hull, Bradford, Stoke-on-Trent, Sunderland and Wolverhampton rank in the most deprived 30 across the country under the latest deprivation indices,” noted the report.
“Although only a single urban area is in the ten most deprived for deprived neighbourhoods countrywide, urban areas are much more prone to be in the most deprived fifth of the nation. The data highlights the scale of difficulties confronting municipal officials across key cities in the next twelve months,” the report added.
“Local government leaders have been explicit about the need for a equitable and lasting funding system that reflects and responds to the actual extent of disadvantage and demand,” stated Michael Mordey.
“Without this, councils will persist to face impossible choices around which essential services to fund, and which to cut, to the disadvantage of their communities.”
One in five of councils have cut or compromised care services in the last year, the study found.
